THE D.C. CIRCUIT'S GIFT TO MICROSOFT: Judge Jackson And The Appearance Of Partiality

To no one's surprise, the D.C. Circuit recently set aside District Judge Thomas Penfield Jackson's order to break up Microsoft. In so doing, the appeals court gave the good folks in Redmond yet more time to consolidate their monopolies, and it proved once again the self-fulfilling assertion that antitrust law is a paper tiger.

True, Microsoft is hardly off the legal hook. Even after the Court of Appeals partially reversed Judge Jackson's findings and voided his order to break up the company, Microsoft is still deemed guilty of multiple instances of monopoly maintenance, and the "tying" charge against the company (based on Microsoft's decision to bundle its internet browser with its operating system) still remains for a new trial court judge to adjudicate. Indeed, even the break-up remedy ordered by Judge Jackson could still be re-imposedthough that is now exceedingly unlikely.

Nevertheless, Microsoft's second-in-command could not help but launch into an extended metaphor about how the sun was shining, the clouds were clearing, and all was good in the world of Windows. Who could blame him? The appeals court had gone to great lengths to find a way to save Microsoft.

Judge Jackson's Comments

Perhaps most important, from Microsoft's standpoint, is that Judge Jackson will not preside over future proceedings in the case. The Court of Appeals found that Judge Jackson was guilty of creating the appearance of partialityand under the applicable standards of judicial conduct, either actual bias or merely the appearance of partiality can disqualify a judge.

The court of appeals used this finding to vacate the judge's order to break up the company. Conveniently, the courtwhich ruled in Microsoft's favor at an earlier stage of this legal marathondecided that the appearance of partiality was only relevant at the stage where the judge was determining remedies, allowing the appellate judges to set aside the break-up order without taking the more extreme action of throwing out the whole case.

The appeals court's conclusion was based on several interviews that Judge Jackson gave with journalists, in which the judge uttered some blunt and unflattering comments about Microsoft and its icon, Bill Gates. Among other things, the judge opined that Gates had a Napoleon complex, that Gates's "testimony is inherently without credibility," and he likened Microsoft's behavior to that of street gangs and drug dealers. The court of appeals was also rather exercised about Judge Jackson's "mule trainer analogy," in which Judge Jackson said that Microsoft, like a stubborn mule, needed to be "whopped upside the head."

Hardly kind words. But should Jackson's comments have disqualified him from deciding further proceedings in the case? Not necessarily, for several reasons.

Why Judge Jackson Should Not Have Been Disqualified

First, Jackson's comments were made after both sides had completed their casesthough before he had issued his verdict, which is what the court of appeals grabbed onto to bolster its finding of an ethics violation.

Thus, neither side could claim unfairness; each had had its opportunity to speak its piece and try to convince the judge. That only one side succeeded is, of course, the nature of litigation.

Consider what the judge had seen during the trial. In one instance, the judge learned that a videotape of one of Microsoft's technical demonstrations was, at best, misleading. The videotape had been edited in a way that significantly misrepresented the capabilities of the software, and Microsoft's lawyers were left trying to claim that they meant no harm. Similarly, Judge Jackson heard Microsoft claim that it was technically impossible to separate the Internet Explorer browser from the Windows 98 operating systemonly to have an expert witness demonstrate that such separation was not only possible, but actually rather simple.

After hearing both sides' cases, the judge decided that one side was in the wrong. Really, really in the wrong. He was entitled to reach that verdict. Indeed, deciding who's right and who's wrong is exactly what finders of fact are supposed to do.

Microsoft, and the court of appeals, emphasized that the judge did not hold hearings on possible remedies before issuing his break-up order. That decision, however, is just as plausibly evidence of a concern for judicial economy as it is of bias. Judge Jackson had heard more than enough, and he was ready to issue his decision.

Second, Jackson's comments seem to have been based on the evidencenot on some pre-existing bias on his part. After all, Judge Jackson is a Reagan appointee and, at least at the start of the trial, was a self-professed skeptic about the power of courts to regulate the economy.

Telling reporters his conclusions before he informed the parties was, perhaps, rude and imprudent on Judge Jackson's part. It must not have been pleasant for Microsoft's officers to hear first in the press that Jackson believed it to be a serial violator of the Sherman Act. Nor must it have been pleasant for them to read of Jackson's belief that they were so blinded by arrogance that they did not even bother to rein in their rhetoric or practices in the face of intense legal scrutiny.

But Microsoft would have had to get the bad news soon, anyway. Hurt feelings should not be the basis for setting aside a judge's decision.

The Court of Appeals' Concerns

Why, then, did the court of appeals remove Judge Jackson from the case? Invoking the rules of judicial ethics, the court said that the judge created at least the appearance of partiality, applying the legal test to conclude that his remarks "would lead a reasonable, informed observer to question [his] impartiality."

But why, exactly, would that cool observer supposedly begin to question Jackson's impartiality? The court offered little insight. Again, the judge spoke only after he heard all the evidence, not before. And the mere fact that his views were definitive should not implyat least to a reasonable, non-Microsoft observerthat they also were biased.

Consider an extreme comparison. In denying Timothy McVeigh's final appeal, District Judge Matsch issued a blistering statement about the damage that McVeigh had caused, saying that any evidence that might exist in the FBI's belatedly discovered files could not possibly change McVeigh's manifest guilt. Yet the appellate court did not decide that Matsch's vehemence alone raised questions of biasdespite the fact that a reasonable observer might have believed that Matsch was, by the time he made his statement, deeply invested in McVeigh's case.

Antitrust trials are not about life and death, of course. But, if anything, that suggests that it was Matsch's decision that should have been reversed. Perhaps, given his comments, Judge Matsch should not have been the judge to determine whether voluminous, newly produced evidence demanded more time for McVeigh's lawyers' review. And perhaps, even despite his comments, Judge Jacksonhighly knowledgeable about the intricate Microsoft caseshould be the judge to determine the rest of Microsoft's fate.

We should all hope that the appellate court did not come to this case with its own bias. If it did not, then we have to take seriously the court's claims that it based its decision on its belief that judges should not "pander to the press." Fair enough. Jackson certainly exhibited bad judgment in speaking before he ruled.

But an admonishment to Jacksonrather than disqualificationshould have sufficed. Was the appellate court's fear that judges may become media hounds really worth giving a serious boost to the fortunes of a company that makes a practice of breaking the law?

Neil H. Buchanan, Ph. D., teaches economics at the University of Michigan, where he is also a J.D. candidate.